Crowd condemns ground rent system

Many express anger at public meeting attended by 200

Sun Follow-up

January 09, 2007|By June Arney | June Arney,sun reporter

Outrage and frustration spilled out last night at a public meeting on ground rent and tax sale property seizures in Baltimore that drew about 200 people.

"I think it's a disgrace that they haven't stopped the practice of ground rent," said Ron Weaver, an investor who told others attending the forum at the Polytechnic Institute/Western High School auditorium that he had to pay fees many times his ground rents for his properties after a new ground rent owner took over.

"I've been involved in property for 30-something years, and I've never seen a case where you could lose your property with no hearing of any kind," he said - other than through being ejected for nonpayment of ground rent.

In the meeting that went past two hours, some members of the audience posed angry questions to speakers including public officials and lawyers, asking what could be considered "reasonable fees," and calling for a thorough investigation of what one person termed "an antiquated system."

"It's unbelievable," said Louis Beverly in an interview during the meeting. "A ground rent is like $69. Can you imagine someone losing their house for $69? You don't lose the house over the ground rent, you lose it for the attorney fees."

Beverly said he owns about 15 investment properties in the city, and has trouble keeping up with ground rents on them.

Recently, after living in a property for 18 years and never paying a ground rent, Beverly said, a new ground rent owner emerged and demanded three years of back payments from him.

"I've been doing this for 16 years," he said. "It's unfortunate that the elderly [faced with lawsuits over ground rent] don't stand a chance in this business. I'm still getting caught up in it."

The meeting came two days before the opening of the 2007 General Assembly session, at which ground rent is expected to be a top legislative issue.

Key lawmakers and Gov.-elect Martin O'Malley's administration plan to meet hours before the session opens tomorrow to discuss phasing out the arcane ground rent system. O'Malley has vowed to play a central role in reform of the centuries-old law.

At that meeting, legislators from both chambers are expected to debate which concepts should be drafted into bills. Proposals being discussed include prohibiting ground rent owners from taking someone's house over unpaid rent and prohibiting property owners from creating new - and more costly - ground rents.

Also under consideration is a policy that would phase out existing ground rents through a system by which they are either redeemed by homeowners or disappear if the ground rent owners don't register their interest within a certain period of time.

Circuit Court Clerk Frank M. Conaway, an announced candidate for mayor of Baltimore, said he organized last night's meeting in response to a flood of inquiries he received from homeowners after the publication of an investigative series by The Sun. The newspaper's stories documented how a small group of investors has used the ground rent law to seize homes or charge thousands of dollars in fees for delinquent bills as small as $24.

Tens of thousands of city homeowners pay rent on the land under their houses. Ground rents also exist in Baltimore and Anne Arundel counties.

The series also reported that homeowners often are unable to locate owners of ground rents on their homes, but are still held responsible for overdue rent. At the same time, investors and rehabbers are placing new 99-year ground rents that are renewable forever on properties that have been sold recently.

june.arney@baltsun.com

To read previous Sun stories, go to baltimoresun.com/groundrent.

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